Guerschon Yabusele said he doesn't want to leave the NBA due to the NBA's retirement plan, which includes a pension, lifetime life and medical insurance, among other benefits.
The New York Knicks forward Guerschon Yabusele revealed that despite limited minutes in the NBA, he doesn't consider returning to Europe.
The French forward's reasoning was pretty understandable – he wants to reap the benefits of the NBA Retirement Plan.
"If you play three years in the NBA, you get a lifetime pension. After four seasons, medical expenses are covered for life," Yabusele explained in an interview.
"And after five years, the medical coverage is extended to the entire family. I want to play for five years here in the NBA so that my family can benefit from that lifetime care. You never know what can happen in life."
So what exactly is the NBA Retirement Plan, and what are the benefits?
Before we begin, the crucial part is years of service, or to put it in simpler terms, the number of seasons the player played in the NBA.
To earn a "Year of Service", a player needs to be listed on the NBA Active or Inactive List at least one day during the regular season.
NBA Retirement Plan benefits
Pension
This one is pretty straightforward, but the size of the pension depends on three different factors:
Years of service
Average salary
Age
Players with at least 3 years of service are guaranteed a minimum pension of $56,988 annually, provided they take it at age 62.
Alternatively, players are allowed to take their pension at 45, but the annual amount is significantly lower.
Meanwhile, players with at least 10 years of service are guaranteed at least $215,000 per year.
NBA Player Health and Wellness Benefit
This is the part Yabusele was referring to. The main benefits include:
Health Reimbursement Arrangement (HRA Benefit)
Insurance/Retiree Medical Plan
Tuition Reimbursement Plan
HRA
HRA is an employer-funded group health plan in which the NBA team covers the cost of eligible medical expenses.
A player receives a fixed amount per year, and the unused money can carry over from year to year.
Insurance/Retiree Medical Plan
Following the latest NBA Collective Bargaining Agreement, the league further increased insurance coverage for its players.
Now it includes:
Life insurance
Accidental death and dismemberment benefits
Disability insurance
Medical insurance
Dental insurance
Vision insurance
Prescription drug insurance
Every player with at least 3 years of service is eligible for these benefits.
Even though Yabusele pointed out that medical coverage is extended to family members after 5 years in the NBA, public reports suggest that spouses and children receive benefits if a player has at least 10 years of service.
Tuition Reimbursement Plan
Most NBA players focus on basketball from a young age, leaving education behind.
However, the NBA's Tuition Reimbursement Plan allows player to earn a degree after their retirement.
Players with at least 3 years of service are eligible for up to $62,500 in tuition benefits each calendar year.
NBA Player 401(k) Plan
For those who don't know, a 401(k) plan is a type of retirement savings account offered by many U.S. employers that allows employees to save and invest a portion of their salary for retirement.
The NBA's plan includes:
Salary Deferral Contributions
Matching Contributions
After-Tax Contributions
Salary Deferral
This one is pretty straightforward. Players can defer a portion of their salary and put it into a 401(k) account.
You might ask what's the point?
It allows players (or any other person) to build savings for the future, giving them the opportunity to contribute to the retirement fund without actually feeling it.
Money deferred into a 401(k) account is automatically withheld from the salary and transferred into a savings account.
Matching Contributions
Now, that's where the actual perks come. Players are allowed to contribute up to $23,000 pre-tax money per year to their 401(k) plan. This allows for a tax deduction for the contribution.
Meanwhile, the NBA offers a 140% employee match.
So, if the player contributes $23,000 to his 401(k) account, the NBA then contributes an additional $32,200.
After-Tax Contributions
NBA players are allowed to contribute more than $23,000 to their 401(k) accounts. The only difference is that anything above $23,000 won't qualify for a tax deduction.
Nevertheless, it's a great way to increase the savings account for the future after retirement.
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